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Aims

To (1) assess trends and variation in the market share of product types and potency sold in a legal cannabis retail market and (2) estimate how potency and purchase quantity influence price variation for cannabis flower.

Findings

Traditional cannabis flowers still account for the majority of spending (66.6%), but the market share of extracts for inhalation increased by 145.8% between October 2014 and September 2016, now comprising 21.2% of sales. The average THC-level for cannabis extracts is more than triple that for cannabis flowers (68.7% compared to 20.6%). For flower products, there is a statistically significant relationship between price per gram and both THC [coefficient = 0.012; 95% confidence interval (CI) = 0.011–0.013] and CBD (coefficient = 0.017; CI = 0.015–0.019). The estimated discount elasticity is -0.06 (CI = -0.07 to -0.05).

Conclusions

In the state of Washington, USA, the legal cannabis market is currently dominated by high-THC cannabis flower, and features growing expenditures on extracts. For cannabis flower, both THC and CBD are associated with higher per-gram prices, and there are small but significant quantity discounts.

This article was published outside of RAND. The full text of the article can be found at the link above.

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